In Gregory v. State, No. 22-35674 (9th Cir. Sept. 27, 2024), the Ninth Circuit Court of Appeals reversed the district court’s sanctions orders and judgment against the State in a § 1983 excessive-force claim, finding that the district court erred in relying on its inherent authority rather than applying the provisions of Rule 37(e) of the Federal Rules of Civil Procedure.

Case Discussion and Judge’s Ruling

In this action under 42 U.S.C. § 1983 involving claims of excessive force on the plaintiff in a May 15, 2020 encounter that occurred in a parking lot adjacent to the Montana Department of Corrections Probation and Parole Office, the entire encounter was captured by an external surveillance camera that monitored the parking lot and that was operated by the Probation Office.

However, the footage was actually subject to only a 17-day retention period. Gregory’s counsel, Dan Flaherty reached out four days after the incident and suggested that Wayne Bye, Deputy Chief for Region 3 of the Montana Department of Corrections record a copy of the footage with his cellphone, which Bye agreed to do. After Flaherty reviewed the cellphone recording and concluded that the quality was too poor to clearly make out what was depicted. Flaherty reached out to Bye, asking if Flaherty could transfer the original footage onto his flash drive or laptop. By the time they were able to figure out the technical issues for doing so, it was early June and the surveillance system had already automatically deleted the footage.

Gregory filed a motion for sanctions against the State based on its loss of the May 15, 2020 surveillance footage, requesting a default judgment and to do so pursuant to the court’s inherent authority, rather than under Rule 37. The district court ultimately granted the motion for sanctions in part, rejecting Gregory’s request to enter a default judgment, but invoking its inherent authority, stating that it would instruct the jury that it was established that “Officer Tomeka Williams used unreasonable force in the seizure of Carrie Gregory,” and the court further held that it would bar any testimony about the lost footage’s content, as well as Bye’s cellphone recording of the footage.

After the case proceeded to trial and witnesses failed to stay within the Court guidelines for testimony, the Court first instructed the jury that, because the State had failed to preserve the video, the jury was permitted, but not required, to infer “that the lost surveillance [footage] would have been favorable to [Gregory].” The court’s subsequent jury instructions told the jury that “it has been established as a matter of law that Defendant Williams used excessive force against [Gregory]…”, and the jury awarded Gregory $75,000 in damages for her excessive-force claim against officer Tomeka Williams.

Noting: “An ‘[a]pplication of the wrong legal standard’ by the district court automatically ‘constitutes an abuse of discretion’”, the Ninth Circuit stated: “Applying these standards, we conclude that the district court committed legal error by relying on its inherent authority in imposing the sanctions that it did rather than applying the provisions of Rule 37(e). We further conclude that, in light of the district court’s factual findings, which are not clearly erroneous, the requirements for imposing such sanctions under Rule 37 were not met. And because the sanctions imposed were obviously prejudicial to Williams, we reverse the adverse judgment against her on the § 1983 excessive-force claim and remand for a new trial on that claim.”

The Ninth Circuit added: “Given Rule 37(e)’s careful specification of the findings that must be made before any sanction may be imposed for a covered loss of information, it is clear that the rule, by its terms, precludes a court from resorting to inherent authority to evade its strictures. Indeed, the advisory committee notes confirm that this effect of the rule’s language was intentional… Because Rule 37(e) governs both the loss of information and the sanctions imposed in this case, and because the rule’s specific requirements preclude invocation of a court’s inherent authority, the district court erred as a matter of law by relying upon its inherent authority rather than applying Rule 37(e).”

Noting that “Rule 37(e)(2) states that, before the court may impose one of the listed sanctions, it must first find that ‘the party’…‘acted with the intent to deprive another party of the information’s use in the litigation’”, the Ninth Circuit stated: “The district court did not find any such intent, either on the part of the State or any of its agents, including Williams. On the contrary, the district court specifically rejected even Gregory’s lesser argument that the loss of the footage resulted from ‘gross negligence on the part of the State and its employees’ and found that ‘Gregory cannot sustain her burden to establish gross negligence or willfulness on the part of the State’…That finding, which is not clearly erroneous, necessarily precludes any finding that the State or Williams acted with the specific intent that we described in Jones and that is required by Rule 37(e)(2). The district court found only that the State’s actions amounted to ‘recklessness,’ but that is not enough to authorize the severe sanctions covered by Rule 37(e)(2) and imposed by the district court here.”

So, what do you think? Are there any situations where Federal Civil Courts can rely on inherent authority to decide sanctions? Please share any comments you might have or if you’d like to know more about a particular topic.

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